Brexit: Michel Barnier insists his ‘mission isn’t over’
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And Professor David Blake said has urged Boris Johnson to hit back by imposing penalties on EU goods of up to £90billion. The Professor of Economics at City, University of London, warned: “What we have learned from the trade negotiations with Michel Barnier is that the EU is a nasty, spiteful vindictive organisation that cannot be trusted.
“It exploited every weakness we had to its advantage. For example, we had to trade off fishing for energy security, such is our dependence on electricity from the EU.
“It is time for the government to wake up and ensure that we have sufficient manufacturing capabilities to give us sufficient defence and energy security and resilience in the future.
“It also needs to introduce measures to counteract the structural undervaluation of the euro which has done so much damage to British manufacturing capability over the last 20 years.”
Prof Blake made his remarks in reference to a contract awarded by the Ministry of Defence in 2019 to the German consortium ARTEC to produce roughly 520 Boxer armoured vehicles to be delivered in 2023.
A year later, ARTEC signed two separate subcontracts with German companies RBSL and WFEL for the local production and assembly of the vehicles.
Mr Blake stressed he was in no way suggesting ARTEC had acted improperly.
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He said: “The key reason is the value of the euro. The euro is a structurally undervalued currency. First, the euro is an ‘incomplete’ currency. Unlike every other currency, there is no single sovereign standing behind it.”
Prof Blake, who outlines his concerns in a paper published on the Social Science Research Network (SSRN), said each of the eurozone’s 19 member states was “sub-sovereign”, and as such do not share joint-and-several liability.
Secondly, he described the euro as an artificially ‘constructed’ currency, as a consequence of the fixed rates used when it was introduced in 1999 to convert the domestic currencies of eurozone members into euros.
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He claimed: “As a result, the euro is undervalued against sterling on what economists call a purchasing power parity (PPP) basis by up to 20 percent.
“This explains why the EU has a £100bn trade surplus with the UK and Germany alone has a £22bn trade surplus. Part of this will be the Boxer contract.”
Prof Blake said: “The EU is dumping its goods onto the UK market and this kind of dumping is illegal under international law.
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“The UK would be entitled to impose an annual anti-dumping duty on EU goods of up to £90bn.
“If it did this, the ARTEC deal would not be so attractive financially.”
Even more significantly, such a move might encourage the government to invest more in manufacturing capacity, especially in defence manufacturing, he added.
Express.co.uk has contacted the European Commission to offer them a chance to respond to Prof Blake’s remarks
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